Farm Bill Incents Biomass
After months of negotiation, Congress passed a comprehensive farm bill Tuesday on a vote of 68-32. It was a rare display of bipartisanship and a hopeful sign proving that Congress can find common ground on key legislative activities. The bill approved allocates a whopping $1 trillion dollars although there were significant cuts to many agricultural subsidies. Of keen interest to us here at Thayer is the funding for alternative fuels. While some argue that the free market should be used to determine what fuels are best, it’s one of the few tools available providing parity for biomass heating fuels and technologies outside of comprehensive tax reform. The oil and natural gas industries receive huge subsidies in the form of tax incentives and direct subsidies from both the Federal government and States.
The bill’s energy title provides mandatory funding for programs including:
- Rural Energy for America Program (REAP): Provides resources to business owners to help finance the installation of renewable energy systems or upgrade existing systems, including those utilizing biomass. Mandatory funding of $50 million per year has been designated and the application process has been simplified and streamlined.
- Bioenergy Program for Advanced Biofuels: Provides direct payments to advanced biofuel producers, including those manufacturing pellets. Mandatory funding of $15 million per year has been designated.
- Biomass Crop Assistance Program (BCAP): Provides financial assistance to owners and operators of agricultural and non-industrial private forest land who wish to establish, produce, and deliver biomass feedstock. This program was allotted $25 million in mandatory funds annually, and the collection, harvest, storage and transportation (CHST) payments will resume, with limitations.
- Community Wood Energy Program (CWEP): The program was altered to allow for grants of up to $50,000 establishing or expanding biomass consumer cooperatives to facilitate purchase of biomass heating systems or products (including their delivery and storage). This program was authorized at $5 million annually, though no mandatory funds were allotted.
The BCAP program could help jumpstart diversification of biofuels used for heating such as fuel crops that could be planted and harvested with little environmental impact. Maine is well suited to grow a majority of the fuel needed for its growing pellet business allowing for alternatives to the harvest of wood. Northern Maine is especially well suited for fuel crops.
The president has expressed his support of the bill and his signature is expected later this week. This bill will boost utilization of biomass heating systems in Maine and across the US.
Dan Thayer, P.E